THE LEAD MARKET.

New Zealand Herald, Volume LXIX, Issue 21143, 29 March 1932, Page 5

THE LEAD MARKET.

STEADY DECLINE IN 1931. CURTAILMENT OF OUTPUT. The course of the lead market in 1931 wus a steady decline in the face of everfalling trade, according to the metal report of Brandeis, Goldschmidt, and Company, London, which states that it was surprising to note how consumption continued. There was little doubt that, but for the action of the lead pool in effecting a 15 per cent, curtailment from May 1, the production of lead would have Leen greater. It was remarkable that in spite of low prices the production of lead had kept up so well during the year, especially in view of the low price of silver, which was usually an important source of additional . revenue to many lead mines. It was also romarkable how costs could be made to adjust themselves to varying conditions. Not many years ago it waR stated that the cost of production of load was about £SO a ton. A year or so later it was being produced with profit with the price at £2l. Near the end of 1931 the price had gone down to little more than £lO gold a ton. but still production continued. Some mines had been forced out of operation, but, on the other hand, a large new producer, the Mount Isa Company, had entered the field. Like the other Australian companies, however, Mount Isa had been helped by the exchange.

There was not an excessive increase of unsold stocks of lead in Europe. These were hard to determine, because a good deal of lead might be stored in private wharves and warehouses, hut the fact remained that in a very difficult year consumption did not appear to have suffered as much as was expected. Russia had appeared as a buyer on and off, and the Far East was a considerable buyer toward the end of the year.

The company's estimate for the world's production of learl in 1931- was 1.393,000 long tons, compared with 1.638,000 tons in 1930, and 1,726,000 in 1929. Great Britain's apparent consumption for the year is shown at 291,014 tons, compared with 287.113 tons for the previous year. In (he United States, where the market was practically independent* owing to tariff restrictions, a continued increase in slocks was registered, and the price moved downwa-d. The stocks, which at the beginning of the year stood at about 90,000 short tons, were 144,000 short tons at the end of December. "The outlook for lead is obscure," the report adds. "Until the affairs of the world show some improvement, and especially if progress is made toward disarmament —as may be hoped—no great increase in consumption can be looked for. Costs will probably be adjusted still further, so that at the present level of prices no great reduction in production, unless artificial, is to be anticipated." GENERAL INDUSTRIES. AUSTRALIAN COMPANY'S LOSS DECLINE IN BUILDING TRADE. Inactivity in the building trade has caused a loss in the accounts of General Industries, Ltd.. an Australian companv, whose subsidiaries are Metters, Ltd., K. F. B. Foundry, Ltd., and Metiers K. F. B. Proprietary, Ltd. The three subsidiary companies during 193] showed a loss of £68.466, against a loss during 1930 of £77,380. The holding company. General Industries, Ltd., made a loss of £124 for Ihe year ended February 28, against a loss of £694 the previous year. In consequence of the loss made by the subsidiary companies, the surplus of assets ov<fer liabilities of those companies has been further reduced by £68,466,' and in order that the holding company through its balance-sheet-may reflect its proportion of the reduction, the directors have decided tb make further provision of £68,447 against the shares held in such .companies. The provision now amounts to £152,034 and. reduces the estimated value of the shares to £1,042,336. The debit balance to be carried forward is £142,529.

The report states that the loss in the trading inevitable in view of the almost complete ■cessation of the building trade. Tlie combined turnover of t)ie trading companies was reduced to approximately one-third of the turnover obtained before the depression, and until the plants can be more fully utilised it will lie impossible to recover all the recurring overhead charges. It is stated tiiut the company is in a position to supply a considerable proportion of Australia's requirements in the various lines manufactured. Since the commencement of the year there has been an improvement in trade.

Metiers (X.Z.), Ltd., which showed a loss of £1563 last year, is a . subsidiary of Metiers, Ltd. (Australia).

THE COPPER INDUSTRY. DECREASE IN CONSUMPTION. WORLD POSITION REVIEWED. In the principal countries of the world the consumption of copper has dropped to practically pre-war level, states the report for 1931 of Brandeis, Goldschniidt and Company, London. In 1913 the world's consumption of the metal was 1,052,000 long tons; in 1928-1929, the boom years, it was 1,835.000. Last year's estimate was 1,210,000 long tons, compared with a world's mining production of 1,280,000 long tons. At the end of the year refined stocks in producers' hands totalled about 510,000 long tons, an increase of 183,000 long tons for the year. In addition, refined stocks in European warehouses increased by about 40,000 tons. The company believes that some considerable time will pass before the consumption of copper reaches the dimensions of th« boom years. Consumption, they slate, was ovcrstimulated by the world-wide in fiat ion which affected all other raw materials, and, in addition, it received a special impetus in the United Slates by the rapid development of light and power companies and public utilities in general, and also by an ambitious progiamine of expansion by the American Telephone Company. " It does not appear probable," the report states, " that we shall have another period of electrical expansion within the next few years on the scale witnessed in the United States from 1925 to 1930. either in that country or in Euiope." All efforts to bring about equilibrium by curtailment of production proved unavailing, the company states, World's production, which two years ngo was more than 2,000,000 ton? a year, was reduced to about 1,250,000 tons without preventing a further heavy increase in the stocks in producers' hands. The brunt of the curtailment was borne by the United States mines, whose output at the end of llie year was less than half what it was two years before.